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Friday, September 10, 2004

How's Your Health? 

David Lazarus diagnoses the many ills of the world's 37th-best healthcare system (albeit Numero Uno in per capita spending), and describes a radically aggressive treatment plan from a group of 12,000 physicians whose vision is far more progressive than anything Messrs. Bush and Kerry are likely to propose in the next four years. Could it work? Maybe in California:
-- The number of Americans lacking health insurance rose last year to a record 45 million from 43.6 million in 2002, according to the latest census figures.

-- About 5 million fewer jobs now provide health insurance than just three years ago, according to a newly released Kaiser Family Foundation survey.

-- For jobs that do provide coverage, insurance premiums climbed 11.2 percent this year, or five times faster than both inflation and average U.S. workers' salaries.

-- Since 2001, premiums for family coverage have soared by almost 60 percent, compared with a 9.7 percent increase in consumer prices and a 12.3 percent gain in wages.

-- More than half of companies with at least 200 workers say it's very likely they will raise employee contributions to health coverage in the near future.

Yet despite such clear evidence of a health care system in crisis, neither President Bush nor Democratic challenger John Kerry has called for meaningful change in how Americans receive medical treatment.

Instead, both candidates favor keeping the current system intact while using taxpayer funds to expand the reach of the insurance industry.

"To expand a system that's not working is absolute insanity," said Don McCanne, a Southern California doctor and former president of Physicians for a National Health Program, a 12,000-strong organization advocating medical coverage for all Americans.

The real solution, McCanne and other health care activists believe, is creation of a so-called single-payer system in the United States.

Under such a system, similar to Canada's state-backed insurance network, any American would be able to receive treatment from any doctor at any hospital nationwide.

It's not so far-fetched. Federal and state taxes, along with tax subsidies for businesses, already account for about 60 percent of the nearly $1.8 trillion expected to be spent this year on health care in the United States, primarily through Medicare and Medicaid . . . .

A payroll tax of about 7 percent would replace all other employer expenses for medical costs, and an income tax of about 2 percent would replace employees' current insurance premiums, co-pays, deductibles and other out-of- pocket expenses.

Harvard Medical School researchers determined earlier this year that about a quarter of all health care spending in the United States is now squandered on bureaucratic overhead, such as clerical staff at doctors' offices to process a vast array of insurance forms.

Under a standardized single-payer system, the researchers estimated, annual administrative costs would be slashed by more than $280 billion. This represents enough money to insure all Americans now lacking coverage and to allow millions of underinsured people to improve their quality of care.
State Senator Sheila Kuehl has introduced legislation that would bring universal single-payer coverage to California at a projected savings of roughly $14 billion in administrative costs. One imposing hurdle is the absence of federal legislation that would allow state health systems to serve as a conduit for Medicare funds. Says Kuehl: "That's going to be difficult under this president and this Congress. The interests of business take precedence at the moment."

Meanwhile, the rising cost of insurance is crippling small businesses, forcing many employers to drop coverage for their workers. Premiums for job-based insurance jumped by 11.2 percent this year, to a new high of $9,950, on average, per family:
The 2004 increase was less than last year's 13.9 percent leap, but it was the fourth consecutive annual double-digit rate hike, according to the annual employer health-benefits survey by the Henry J. Kaiser Family Foundation and the Health Research and Education Trust.

Although premium increases moderated, employer payments for health insurance still rose five times faster than the rate of inflation and workers' earnings . . . .

According to the Kaiser study, premiums for family coverage increased 59 percent since 2000. During the same period, contributions employees made to pay for insurance went up 57 percent, while wages rose just 12 percent.

Meanwhile, the number of small firms nationwide that offered coverage decreased to 63 percent this year from 68 percent in 2001. In 2004, at least 5 million fewer jobs provided health insurance than in 2001.
And, of course, employers are not the only ones feeling the pinch:
[T]here are signs that steeply rising health care costs could be an even bigger factor than gasoline in slowing the American consumer spending machine that drives the economy. As employers have tried to lighten their own health care loads by asking workers to pay more in premiums and co-payments, Labor Department data show that health care costs are taking a bigger slice of household budgets . . . .

"This health tax falls most heavily on those at the bottom of the income spectrum because they have to spend a higher portion of their income to cover these costs,'' [economist Sung Won] Sohn said.

Labor Department data show households where wage-earners had advanced degrees spent 3.8 percent of their after-tax income on health care. In households where workers didn't complete high school, the comparable figure was 7.2 percent.

Retail sales data show that growth is slowing significantly at stores catering to low- and middle-income households and growing rapidly at chains targeting upper-income customers.

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